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AI Limiting European Workers’ Bargaining Power, ECB’s Lane Says
Lane said AI may weaken workers’ bargaining power and raise long-term borrowing costs, adding pressure to wage growth and ECB policy.
- On Tuesday, European Central Bank Chief Economist Philip Lane stated that while AI could boost long-term growth, heavy corporate investment is currently tightening financial conditions and curbing workers' ability to demand higher wages.
- With inflation remaining near twice the ECB's 2% target due to expensive energy, policymakers are searching for signs of second-round price effects but have found none in wage growth.
- Lane said in a speech in Dublin that "The potential for AI to replace some types of workers may also weaken the bargaining power of workers, moderating wage growth and reducing the labour share in total income."
- Global companies borrowing heavily to fund AI are pushing up long-term interest rates, which Lane said constitutes a material tightening of financial conditions relevant for the ECB's monetary policy stance.
- For Europe, the potential for AI to offset the projected decline in the working-age population is especially valuable, as the technology could increase the economy's potential 'speed limit,' Lane said.
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12 Articles
12 Articles
AI limiting European workers' bargaining power, ECB's Lane says
·London, United Kingdom
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THE APPLICATION of AI in the eurozone is weakening the bargaining power of workers, and investments in technology are raising the cost of borrowing for everyone, warns the ECB's chief economist, Philip Lane.
·Zagreb, Croatia
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With regard to the labour market, Philip Lane still sees no major change in aggregate employment trends
·São Paulo, Brazil
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The increased use of artificial intelligence (AI) by Eurozone companies may limit workers' ability to demand higher wages.
Coverage Details
Total News Sources12
Leaning Left2Leaning Right0Center2Last UpdatedBias Distribution50% Left, 50% Center
Bias Distribution
- 50% of the sources lean Left, 50% of the sources are Center
50% Center
L 50%
C 50%
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